Northeast's Tougher Carbon Cap Seen Doubling Critical Revenues by 2020

When the nine states in the Regional Greenhouse Gas Initiative, a cap-and-trade system, agreed last week to dramatically limit power plant emissions, they ushered in a stricter phase of carbon regulation for the Northeast. But they also paved the way for a boom in clean energy investment for the region.

According to a recent analysis, the amount of money generated from the tougher scheme is projected to more than double by 2020, sending an additional $2.2 billion of RGGI money to state coffers—much of that to clean energy industries.

Since RGGI began over four years ago, the program has generated more than a billion dollars for the cash-strapped states that have participated. States are required to use at least 25 percent of their proceeds in efficiency and other programs that benefit consumers. But actually, 80 percent was spent on energy savings, renewable electricity and ratepayer assistance.

Now, states plan to cut the total amount of carbon dioxide that power plants can emit by 45 percent—a move expected to increase the price of emitting carbon by five-fold, boosting revenues.

Massachusetts, one of the RGGI states, is predicted to rake in an extra $350 million from the change during the next several years.

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